The medically needy program was a state-run program for which the state
obtained federal funding under the federal Medicaid program. (1) As we have already
described, in late 2002, in response to legislative cuts to its budget, DHS decided not to
allocate any funds to the medically needy program and, instead, to close and terminate the
program altogether, effective February 1, 2003. To effectuate that policy choice, DHS
adopted temporary and, later, permanent administrative rules. See OAR 461-135-0721
(declaring that the medically needy program "is not funded" and is closed effective
February 1, 2003); OAR 410-120-1190 (declaring that the medically needy program is
"eliminated" effective February 1, 2003). After the temporary rules were adopted, but
before they took effect, DHS sent notices to petitioners advising them that their benefits
under the medically needy program were to be terminated as of February 1, 2003, in
accordance with DHS's decision to end the program due to budget cuts. In addition, DHS
advised petitioners that they were not entitled to a hearing to contest the decision to
terminate their benefits. DHS based that procedural advice on a third administrative rule
change by which DHS amended OAR 461-025-0310(3) to state that a recipient of
benefits has "no right to a hearing to dispute a program requirement established by law.
Examples are the closure of a program or a change to a payment standard." Petitioners
requested contested case hearings just the same, and DHS denied their requests.

Petitioners then sought judicial review in circuit court pursuant to ORS
183.484, which provides for review of final orders in other than contested cases.
Advancing several theories, petitioners challenged the validity of DHS's rules that
eliminated funding for and terminated the medically needy program. The trial court
granted summary judgment in favor of DHS after concluding that there were no disputes
of material fact and that the challenged rules were valid as a matter of law.

As already noted, the pivotal issue is whether DHS's notices were final
orders in cases other than contested cases. (2) If so, the circuit court had jurisdiction to
review them. See ORS 183.484 (circuit court has jurisdiction to review final orders in
cases other than a contested case). If not, and if they were final orders in contested cases,
then this court had jurisdiction to review them. See ORS 183.482(1); Oregon Health
Care Assn. v. Health Div., 329 Or 480, 488, 992 P2d 434 (1999) (petitions for judicial
review are available under ORS 183.482 and ORS 183.484 only as to final orders);
Oregon Env. Council v. Oregon State Bd. of Ed., 307 Or 30, 37, 761 P2d 1322 (1988)
(orders in contested cases are reviewed in this court). ORS 183.310(2)(a) defines a
"[c]ontested case" to include

"a proceeding before an agency:

"(A) In which the individual legal rights, duties or privileges
of specific parties are required by statute or Constitution to be
determined only after an agency hearing at which such specific parties
are entitled to appear and be heard[.]"

Under that definition, the correct characterization of DHS's orders depends not on
whether DHS actually afforded each petitioner a hearing, but on whether DHS was
required by a statutory or constitutional provision to do so. Patton v. St. Bd. Higher Ed.,
293 Or 363, 366-67, 647 P2d 931 (1982) (so interpreting the statute).

Petitioners point to ORS 411.095(3) as the source of DHS's legal obligation
to offer them contested case hearings before terminating their benefits. That statute
provides, in part:

"[W]hen the department proposes to deny, reduce, suspend or terminate a
grant of general assistance, a grant of public assistance or a support service
payment used to support participation in the job opportunity and basic skills
program, the department shall provide an opportunity for a hearing under
ORS chapter 183."

By its express terms, the statute requires DHS to offer a hearing when the agency
proposes to "terminate" a grant of general assistance or public assistance. Medically
needy benefits qualify as such assistance, and DHS does not suggest otherwise. The plain
text of ORS 411.095(3), together with the plain text of ORS 183.310(2)(a)(A), compels a
conclusion that DHS was obligated to offer petitioners contested case hearings before
proposing to end their medically needy benefits. See PGE v. Bureau of Labor and
Industries, 317 Or 606, 610, 859 P2d 1143 (1993) (first step in interpreting a statute is to
consider text and context; other guides in interpreting a statute are considered only if text
is ambiguous).

The next question is: Is that what DHS proposed to do in the notices that it
sent to petitioners--that is, did DHS propose to terminate petitioners' grants of medically
needy benefits? The answer is plainly yes. The notices were individually addressed and
sent to petitioners at their personal addresses (presumably, their residences). The notices
were entitled "End of Medical Benefits" and stated:

"This notice is about an important change. The medical program which
allows you to get a medical card each month is ending. It is called
Medically Needy. The state no longer has the funding to provide this
program. It will end on January 31, 2003.

"Because of this change,your medical benefits will end on January 31, 2003.

"* * * * *

"This change affects many people in Oregon. We cannot grant a hearing based on
the end of the Medically Needy program. You have the right to request a hearing
on other issues. Read Part I on the back of this form for more information."

(Emphasis added.) Part I on the back of the form then explained, among other things, the
specific procedures for hearings and expedited hearings and how a person should initiate
a request for a hearing to which he or she has a right.

By their express terms, the notices did more than simply notify individuals
receiving grants that the program was being terminated. After announcing the end of the
program, the notices further told each individual grant recipient that "your medical
benefits will end" as of a date certain. There is no ambiguity in that announcement. Each
grant recipient was told that DHS was proposing to terminate his or her individual grant
of assistance on January 31, 2003. To be sure, the notice also gave DHS's reason for
taking that action (i.e., the closure of the program). But DHS's explanation of why it was
taking proposed action does not change the reality of what it proposed to do--that is,
terminate the grant of monetary assistance to which each recipient, until then, had been
entitled by way of a government grant. Thus, the action that DHS proposed to take falls
squarely within the terms of ORS 411.095(3) and entitled petitioners to a hearing. In
turn, under ORS 183.310(2)(a)(A), the hearing to which petitioners were entitled was a
contested case hearing. See also OAR 461-025-0310(1)(l) (whenever a person is entitled
to "a hearing" by rule or statute, DHS must provide that person with a "contested case
hearing").

In arguing otherwise, DHS takes a narrow view of ORS 411.095(3).
According to DHS, the statute requires it to offer a hearing only when it proposes to deny,
reduce, suspend, or terminate a grant as a result of an "individualized decision directed at
a specific recipient." Focusing on the reference in the statute to a "grant" of assistance,
DHS argues that the statute does not apply to terminations of medically needy grants of
assistance due to a decision to terminate an entire program, as opposed to a decision
terminating a grant based on individual-specific reasons. Moreover, according to DHS,
when a grant is ended because the program of assistance is discontinued, a hearing would
serve no purpose because there are no individualized facts to be adjudicated; rather, there
is only the legislative-like policy decision to end the program to test. DHS urges that we
should not interpret the statute to require the agency to perform the useless act of holding
a contested case hearing to test a legislative-like policy choice of that kind. See
MacVeagh et al. v. Multnomah Co. et al., 123 Or 345, 349, 262 P 248 (1927), modified on
other grounds on reh'g, 126 Or 417, 270 P 502 (1928) (a court should not presume that
the legislature intended that a useless act should be done).

The dissent takes a different tack and disagrees with our view of the
substance of the notices themselves. According to the dissent, DHS's notices were not
orders at all, but instead merely advised petitioners that the medically needy program was
being terminated. See, e.g., ___ Or App at ___ (Schuman, J., dissenting) (slip op at 2).
Specifically, the dissent urges that "the notices themselves had no operative effect
whatsoever; had DHS never sent them, petitioners would nonetheless have lost their
benefits. The operative act that terminated petitioners' benefits was the promulgation of
the rule that defunded the medically needy program." Id. at ___ (Schuman, J., dissenting)
(slip op at 4).

Relying on its view of the purpose of the notices, the dissent argues
alternatively that, even if ORS 411.095(3) requires a hearing in this case, the hearing to
which petitioners were entitled is a rulemaking hearing, not a contested case hearing.
There are three problems with the dissent's argument. First, DHS's own notice in this
case advised petitioners that they were entitled to contested case hearings; the agency
simply tried to limit the scope of that hearing by declaring that petitioners could not raise
a challenge to the end of the program in any such hearing. Second, DHS by rule provides
that a person has a right to a "contested case hearing" whenever a person is entitled to a
hearing by rule or statute. OAR 461-025-0310(1)(l). In fact, DHS by rule provides that a
person has a right to a "hearing" when it issues a "notice informing clients that their
benefits are," among other things, "ended." OAR 461-105-0010(5). That is precisely
what the notices in this case did. Thus, either by virtue of the terms of ORS 411.095(3)
or by the terms of the agency's own rules, DHS was obligated to giving petitioners a
contested case hearing, not a rulemaking hearing. Finally, even under the dissent's
analysis, DHS did not meet its hearing obligation. DHS's notices did not tell petitioners
that they had a right to a rulemaking hearing. Rather, DHS advised them that they had no
right to challenge the decision to end the program. The dissent does not explain what
consequences should flow from that wrong advice, but presumably, petitioners are
entitled to some form of agency level hearing that they never received.

In all events, the dissent's view of the notices is wrong, and it is a view of
them that DHS does not endorse. DHS agrees that the notices were orders. Its only
disagreement is whether ORS 411.095(3) extends to a decision to terminate a grant of
medical assistance based on program closure, rather than individual eligibility. As we
have explained, the statute is unqualified and provides for an opportunity for a hearing
regardless of the reason for terminating the individual grant of assistance. Because the
statute gave petitioners a right to a hearing, the hearing to which they were entitled was a
contested case hearing. ORS 183.310(6)(a); OAR 461-025-0310.

The question that follows from that conclusion is this: What is the
appropriate disposition of this appeal? Before 2001, petitioners' pursuit of judicial review
in circuit court rather than in this court would have been a jurisdictional defect, one that
required any judgment entered to be vacated and the case to be dismissed. See, e.g., Lone
Oak Racing, Inc. v. Oregon Racing Commission, 162 Or App 111, 123, 986 P2d 596
(1999). Petitioners' failure to timely file a petition for judicial review in this court would
have been a procedural default that would prevent them from challenging DHS's orders.

In 2001, however, the legislature enacted ORS 14.165, (6) which was
designed to "fix" at least a portion of the problem that arises when a person challenging a
government action seeks review in the wrong court. Among other provisions, the statute
authorizes--and, indeed, requires--a circuit court in which judicial review is wrongly filed
to transfer the case to the appropriate forum. ORS 14.165(1)(a). If the circuit court is
unsure of which court or tribunal has authority to decide the case, the circuit court is to
refer the case to this court, which then must make that determination. ORS 14.165(1)(b).
Similarly, if the proceeding is wrongly filed in this court, we are to transfer the case to
any other court or tribunal that has authority to decide the case. ORS 14.165(2)(a). If no
court or tribunal has authority to decide the case--as might happen, for example, if an
administrative order is not final--the proceeding is to be dismissed. ORS 14.165(1)(c),
(2)(b). The statute specifies that, subject to exceptions that do not apply in this case, a
transferred proceeding will not be dismissed as not being timely filed. ORS 14.165(7).

The one point on which the parties implicitly agree is that petitioners'
failure to file in this court, and the fact that they filed in circuit court instead, does not
deprive us of jurisdiction. We concur. ORS 14.165 was designed to cure the
jurisdictional trap that arises by filing in the wrong forum, and it does so. Under the
terms of that statute, if a party wrongly files an action or proceeding in either the circuit
court or this court, and does so reasonably and without prejudicing an adverse interest or
the public interest, the tribunal with authority to decide the case is not deprived of
jurisdiction to decide it. ORS 14.165(7). Instead, the statute provides for the case to be
transferred to the correct tribunal and for that tribunal to resolve it as though the
proceeding had been timely filed in the correct forum in the first instance. Thus,
petitioners' failure to timely file petitions for judicial review in this court was not a
jurisdictional defect.

Although the case did not come to this court on a transfer or referral order,
it did come to us through a procedurally proper vehicle--that is, a timely filed notice of
appeal of the circuit court judgment. The problem, however, is that DHS has yet to
provide petitioners with contested case hearings to challenge its proposed termination of
their benefits. On timely request, each petitioner is entitled to a contested case hearing
conducted by an administrative law judge (ALJ) in the Office of Administrative Hearings.
ORS 183.635. After that hearing, DHS may either affirm the ALJ's proposed order or
explain its reasons for modifying it. ORS 183.650(2). If the orders are adverse to
petitioners, they will be entitled to seek judicial review by this court. Petitioners'
challenges to DHS's orders will then come to this court on a fully developed record and
with a fully articulated order by DHS.

As matters now stand, we do not have the benefit of an administrative order
issued after a full contested case hearing; we have only the summary judgment
determination of the circuit court. Both legally and practically, petitioners have not
received the equivalent of either a contested case hearing or of an articulated
administrative order that would follow a contested case hearing. ORS 14.165 permits us
to exercise jurisdiction over the case, but it does not permit us to deny petitioners the
administrative hearings to which they are entitled. Said differently, nothing in ORS
14.165 permits us to substitute a circuit court proceeding--especially one resolved on
summary judgment--for a contested case hearing held by the administrative agency
charged with providing one.

In 2002, the Department of Human Services (DHS), responding to a
$2,600,000 budget cut, promulgated a temporary rule terminating a program for medically
needy individuals and shortly thereafter sent to each of the program's beneficiaries a
notice of its termination effective February 1, 2003. Petitioners, who were receiving
benefits under the program at the time, requested contested case hearings. When the
agency denied their requests, petitioners sought judicial review in Multnomah County
Circuit Court. Their petition, as ultimately amended, claimed that, in terminating the
program, the agency exceeded its statutory authority and violated several provisions of the
Oregon Constitution. They sought invalidation of the rule, an injunction against its
enforcement, and a declaration setting aside the notices they had received informing them
of the program's termination. DHS filed a motion to remove the case to the Court of
Appeals; that court, according to DHS, had exclusive jurisdiction because the case was a
challenge to a rule and not to an order. ORS 183.400(1). The court denied the motion,
ruling instead that the case was properly filed in the circuit court because it was a
challenge to orders in other than contested cases. ORS 183.484. Thereafter, the court
allowed DHS's motion for summary judgment and denied petitioners' motion for a
preliminary injunction. Petitioners appeal.

The majority does not reach the merits, holding instead that the trial court
erroneously treated the notices that DHS sent to petitioners as "orders in other than
contested cases," review of which was in the circuit court. Rather, the majority holds, the
notices were "orders in contested cases," review of which is in this court. ORS 183.482.
___ Or App ___, ___ (slip op at 4-8). The majority goes on to hold that, because
petitioners should have been granted individual contested case hearings, the proper
disposition of the case is to remand it to DHS so that such hearings can take place. Id. at
___ (slip op at 17-18).

I dissent. In my view, the trial court erred at the outset when it determined
that it, and not this court, had jurisdiction. The notices that DHS sent to petitioners were
not orders at all. They were nothing more than notices, and, for that reason, the circuit
court never had jurisdiction. See Calif. Table Grape Comm'n v. Dept. of Human Res.,
109 Or App 222, 818 P2d 983 (1991) (discussing difference between notices and orders;
holding that circuit court has no jurisdiction to review nonorders).

To reach the conclusion that petitioners were entitled to contested case
hearings, the majority invokes the statutory definition of that term, which includes a
proceeding before an agency in which "individual legal rights * * * of specific parties are
required by statute * * * to be determined only after an agency hearing at which such
specific parties are entitled to appear and be heard[.]" ORS 183.310(2)(a)(A) (emphasis
added). The majority then identifies ORS 411.095(3) as the statute serving as "the source
of DHS's legal obligation" to provide petitioners with contested case hearings. ___ Or
App at ___ (slip op at 5). That statute provides, in part:

"[W]hen [DHS] proposes to deny, reduce, suspend or terminate a
grant of general assistance, a grant of public assistance or a support service
payment used to support participation in the job opportunity and basic skills
program, the department shall provide an opportunity for a hearing under
ORS chapter 183."

Immediately after quoting the statute, the majority states:

"By its express terms, the statute requires DHS to offer a hearing when the
agency proposes to 'terminate' a grant of general assistance or public
assistance. Medically needy benefits qualify as such assistance, and DHS
does not suggest otherwise. The plain text of ORS 411.095(3), together
with the plain text of ORS 183.310(2)(a)(A), compels a conclusion that
DHS was obligated to offer petitioners contested case hearings before
proposing to end their medically needed benefits. See PGE v. Bureau of
Labor and Industries, 317 Or 606, 610, 859 P2d 1143 (1993) (first step in
interpreting a statute is to consider text and context; other guides in
interpreting a statute are considered only if text is ambiguous)."

Id. at ___ (slip op at 5). The majority's assertion that the "plain text" of the statute
requires contested case hearings is manifestly wrong. The "plain text" of ORS
411.095(3) nowhere "expresses" the term contested case, nor does it refer to ORS
183.310(2)(a)(A). What the statute's plain text expressly states is that, when DHS
proposes to terminate a grant, it "shall provide an opportunity for a hearing under ORS
chapter 183." (Emphasis added.) ORS chapter 183 provides for two kinds of hearings:
contested case hearings, ORS 183.413 to 183.470, and rulemaking hearings, ORS
183.335.

It is arguable that the term "hearing under ORS chapter 183" means a
contested case hearing. But I use the term "arguable" advisedly. To establish that
interpretation, particularly in light of the fact that, as this case demonstrates, sometimes a
grant is terminated by virtue of a rule and sometimes by virtue of an individualized
determination that a person does not meet preexisting criteria, the majority needs to do
more than rely on an erroneous assertion. It needs to provide an argument.

As I attempt to show below, I believe that examination of the text, context,
and legislative history of ORS 411.095(3) demonstrate that the statute does not entitle
petitioners to a contested case hearing. But the majority opinion suffers from a more
fundamental flaw, which I address first: ORS 411.095(3) simply does not apply in this
case.

Indeed, we have already decided the issue. In Calif. Table Grape Comm'n,
the Health Division of the Department of Human Resources (Division) adopted a
temporary rule prohibiting the sale of all sulfite-treated foods. 109 Or Appat 224.
Within a few days, the Division sent notices of the new rule to all food service facilities,
concluding with the statement, "As of November 1, 1988, grapes treated with sulfites
cannot be served in a food service facility." Id. at 225 (emphasis in original). Petitioners
sought review of the notice in circuit court, arguing that the notice was an order in other
than a contested case. This court, sitting en banc, rejected that argument:

"Division contends that the notice is not an 'order,' because it is
directed generally to all food service facilities, not to a named person or
persons. In addition, it contends that, because the notice does not mandate
specific action by any party or alter the interpretation of existing rules, it is
only intended to announce the reinstatement of [an earlier rule] upon
expiration of the temporary rule.

"We agree. The notice is intended to fulfill the requirement that
affected persons must be notified of a rule change. ORS 183.355(2)(b).
Petitioners' challenge to the notice is intended as a challenge to the validity
of OAR 333-151-010(4). That challenge is before this court in [a separate
case involving the same parties.] * * * The notice was not an order within
the meaning of ORS 183.310(5)(a) and petitioners are not entitled to
judicial review in circuit court under ORS 183.484. The circuit court
properly dismissed the petition for lack of jurisdiction."

Id. The only difference between Calif. Table Grape Comm'n. and this case is
inconsequential. There, the notices were addressed to all "food service facilities," id. at
224, where in the present case, each notice is captioned with a recipient's name. In both
situations, however, the notices were evidently mailed to individuals named on the
envelope, see id. at 224 ("Division sent a notice of the rule * * *." (Emphasis added.)),
and in both cases the notice was addressed to a discrete group of individuals: operators of
food service facilities governed by the Division, in the earlier case, and, in the present
case, recipients of benefits under the medically needy program. The legal principle
governing the cases is identical: When, after promulgating a rule--particularly a
temporary rule--an agency sends notice of that rule to those who are affected by it, the
notices are not orders in contested cases and the circuit court does not have jurisdiction to
review them. Rather, the proper challenge is to the rule of which the notices inform
recipients, and review of that rule is in this court pursuant to ORS 183.400.

Thus, ORS 411.095(3) is simply not relevant in this case. Even if it were,
however, it does not entitle petitioners to contested case hearings. The statute began as
House Bill (HB) 1213 (1971), later enacted as Oregon Laws 1971, chapter 734, section
41. According to a memorandum prepared by the Administrative Law Committee of the
Oregon State Bar, the bill's principal drafter, the bill performed two functions: it
amended the existing Administrative Procedures Act (APA), and it made conforming
amendments to various provisions elsewhere in the ORS. Section 41 appears to be among
the conforming amendments, although, oddly, there was no preexisting statute to amend.
In any event, the committee provided the following rationale for the conforming
amendments:

"The Committee undertook to amend only those sections of ORS that
were inconsistent with H[B] 1213 or created ambiguities. Where the
existing provision does no more than authorize adoption of regulations or
the holding of hearings, but does not specify procedure, any specific
reference to ORS 183 is unnecessary. H[B] 1213 speaks in mandatory
terms and does not require incorporative language to be effective on all
state actions of whatever nature, so long as there are no inconsistent
provisions in other statutes.

"Where a hearing was of a type (i.e. revocation of an occupational
license) which H[B] 1213 requires to be a 'due process' hearing, the
conforming legislation does not incorporate the requirement that the hearing
be conducted as a 'contested case.' Where, however, the hearing would not
by force of H[B] 1213 be a 'due process' hearing, but the legislative intent
was clear, we have specifically provided that the hearing shall be held as a
'contested case.' Where it was unclear which type of hearing was intended
by the legislature, we left the matter as it now exists."

I interpret this somewhat cryptic explanation as follows: In combing through the ORS to
find statutes that needed conforming amendments, the drafters found statutes describing
various types of proceedings before agencies. First, they found statutes that called for
hearings that were of a type that the APA, as amended by HB 1213, would explicitly and
by its own force require to be contested case hearings, for example, revocation of an
occupational license, named as a contested case in HB 1213. Statutes in that category did
not need amendments because they clearly called for contested case hearings. The second
category included statutes in which the legislature clearly intended that contested case
hearings should occur, but the statutes were not specifically named in HB 1213 ("where
the hearing would not by force of H[B] 1213 be a 'due process' hearing" (emphasis
added)). Included in this category would be situations that, in the terms of HB 1213, "are
required by statute or Constitution to be determined only after an agency hearing at which
specific parties are entitled to appear and be heard." In other words, this category
includes proceedings that are brought into HB 1213 by incorporation (via the Constitution
or some statute that is not HB 1213), as opposed to proceedings in the first category that
are actually named in HB 1213. When the legislature's intention to confer contested case
status on such proceedings was clear, the committee "specifically provided that the
hearing shall be held as a 'contested case.'"

Notably, section 41, later ORS 411.095(3), was not in that category. The
legislature did not "specifically provide that the hearing shall be held as a 'contested
case.'" The unavoidable inference is that the drafters of HB 1213, including section 41,
did not believe that the legislature clearly intended (or would have intended) the hearings
in that section to be contested case hearings. Rather, section 41 would fall into the third
category: statutes "where it was unclear which type of hearing was intended by the
legislature."

At the very least, this legislative history compels the following conclusions.
First, the drafters of ORS 411.095(3) knew how to specify that a hearing had to be a
"contested case" and they did not do so. Second, the drafters of ORS 411.095(3) did not
believe that the legislature clearly called for contested case hearings under ORS
411.095(3). That being the case, I would argue that the context of ORS 411.095(3),
which includes ORS chapter 183, would compel the conclusion that, when the
termination of a grant of public assistance results from a quasi-legislative decision, no
contested case hearings need occur. That is so because not only the Oregon APA, but all
of administrative law, flows from the fundamental difference between quasi-adjudication
and quasi-legislation, and the constitutionally mandated procedures that each entails:
contested case hearings and "on the record" decisions for quasi-adjudication, and mere
procedural regularity for quasi-legislation.

In sum, I would hold that the notices under challenge in this case are not
orders. The circuit court lacked jurisdiction to review them. Petitioners' challenge is only
to the rule ending the medically needy program; they assert that it violates the constitution
and that it exceeds the agency's statutory authority, both assertions that are cognizable
under ORS 183.400. The challenge should have been brought originally in this court.
We should either remand the case to the circuit court with instructions to transfer the case
back to us, see ORS 14.165(1)(a), or, in the interest of judicial economy and the timely
disposition of cases, decide it on the merits now.

"In order to participate in the Medicaid program, a State must have
a plan for medical assistance approved by the Secretary of Health
and Human Services (Secretary). 42 USC § 1396a(b). A state plan
defines the categories of individuals eligible for benefits and the
specific kinds of medical services that are covered. §§
1396a(a)(10), (17). The plan must provide coverage for the
'categorically needy' and, at the State's option, may also cover the
'medically needy.'"

(Footnotes omitted.)

By way of a footnote, the Court explained that the "categorically needy"
groups include "individuals eligible for cash benefits under the Aid to Families with Dependent
Children (AFDC) program, the aged, blind or disabled individuals who qualify for supplemental
security income (SSI) benefits, and other low-income groups such as pregnant women and
children entitled to poverty-related coverage." Id. at 651 n 4. The Court also explained that
"medically needy" persons are "individuals who meet the nonfinancial eligibility requirements
for inclusion in one of the groups covered under Medicaid, but whose income or resources
exceed the financial eligibility requirements for categorically needy eligibility." Id. at 651 n 5.

2. Although the parties did not raise the issue of whether DHS's orders terminating
petitioners' benefits are orders in contested cases, we asked them to address it because of its
bearing on the circuit court's jurisdiction and authority in this case. More specifically, we asked
the parties whether DHS's notices to petitioners are orders in contested cases, whether the notices
are final orders, and, depending on their answers to those questions, the appropriate disposition
of the appeal. The parties submitted additional briefing on those issues.

3. The policy choice is not ours to make. It is worth noting, however, that it is less
than clear to us that a contested case hearing necessarily would be useless in these or any similar
cases, as DHS urges. For one thing, contested cases are appropriate proceedings in which to
raise even purely legal challenges to broad-based rules, which is how DHS characterizes
petitioners' challenge in this case. See ORS 183.400(1); Minor v. AFSD, 105 Or App 178, 804
P2d 1170 (1991) (while a contested case remains available, or the ability to challenge the order in
a contested case remains available, invalidity of a rule must be asserted in the contested case
rather than through a petition to the Court of Appeals). To whatever extent petitioners'
challenges to DHS's rules raise issues that require or would benefit from an evidentiary record, a
contested case is an appropriate procedural means to develop that record. See generally Oregon
Newspaper Publishers v. Dept. of Corrections, 329 Or 115, 118-19, 988 P2d 359 (1999)
(distinguishing facial and "as applied" challenges to agency rules). Here, DHS made evidentiary
submissions in support of its motion for summary judgment in the form of affidavits from DHS
administrators that provided factual information about DHS's budget cuts and the reasoning
behind its decision not to fund the medically needy program. Moreover, in theory at least, even
when individual grants are to be terminated due to a program closure, there could be
individualized errors that require correction--for example, DHS could have the wrong date for
terminating benefits or it could mistakenly propose to terminate a grant of assistance for someone
whose grant is pursuant to a different program.

But in all events, even if DHS is correct and individualized hearings would not be
useful, the argument is beside the point. As DHS acknowledges, the maxim of statutory
construction on which it relies (i.e., that a court should not construe a statute to require a useless
act) can be considered only if the statute is ambiguous. Here, it is not. The statute requires DHS
to offer a hearing when DHS proposes to terminate a grant of assistance, and it does so without
regard to whether a hearing would be "useful" in the agency's decision-making process.

4. The dissent points out that DHS had a statutory obligation to notify petitioners of
its adoption of its temporary rule, see ORS 183.355(2)(b), and the notices to petitioners may have
been DHS's attempt to comply with that obligation. ___ Or App at ___ n 1 (Schuman, J.,
dissenting) (slip op at 4 n 1). DHS, which drafted and sent the notices, does not take that view of
them, significantly. Nor would such a view be well-founded. The terms of the notices were
inadequate to satisfy DHS's statutory obligation to provide notice of its rulemaking. The notices
announced the end of the medically needy program, but they said nothing about DHS's temporary
rule and did not so much as cite the temporary rule that the agency had promulgated.

The fact that DHS did not send these notices to petitioners to meet its statutory
obligation under ORS 183.355(2)(b) distinguishes Calif. Table Grape Comm'n v. Dept. of
Human Res., 109 Or App 222, 818 P2d 983 (1991), on which the dissent relies. Indeed, it makes
the dissent's reliance on that case perplexing. In Calif. Table Grape Comm'n, we observed that
the agency, in issuing the notices, "intended" the notice to comply with ORS 183.355(2)(b). The
only question was whether its notices nevertheless were orders. In concluding that they were not,
we relied first on what the agency intended in issuing them. 109 Or App at 225. Beyond that,
the notices in that case were significantly different from these notices in substance. There, the
notices "announced" an adoption of a prospective agency regulatory policy--i.e., that food service
facilities could no longer serve grapes preserved with sulfites. Id. We agreed with the agency's
argument that the policy was not directed to a named person or persons and was therefore not an
order within the meaning of ORS 183.310(6)(a). Id. The dissent misreads Calif. Table Grape
Comm'n when it understands its "not an order" holding to apply to: (1) a notice directed to
specific individual, as each of these notices unequivocally was; (2) a policy that cuts off an
entitlement to an individually granted ongoing government benefit, as opposed to one that
announces a change in regulatory policy with which someone must prospectively comply; and (3)
a notice that the agency intended to be an order, rather than a notice pursuant to ORS 183.355(2).

5. Petitioners argue that the orders they challenge must be considered tentative or
preliminary because DHS did not hold the contested case hearings to which they are entitled.
DHS's procedural failure bears on the correct disposition of this case, but it does not mean that
DHS's notices were not final.

"(1) If an action or other proceeding against a public body is filed in
circuit court and the circuit court does not have authority to decide the case, the
circuit court shall:

"(a) Transfer the case to the court or tribunal authorized by law to decide
the case if the circuit court determines that another court or tribunal is authorized
by law to decide the case;

"(b) Refer the question to the Court of Appeals if the circuit court is in
doubt whether there is another court or tribunal authorized by law to decide the
case; or

"(c) Dismiss the action or proceeding if the circuit court determines that
no other court or tribunal is authorized by law to decide the case.

"(2) If an action or other proceeding against a public body is filed in the
Court of Appeals and the Court of Appeals does not have authority to decide the
case, the Court of Appeals shall:

"(a) Transfer the case to the court or tribunal authorized by law to decide
the case if the Court of Appeals determines that another court or tribunal is
authorized by law to decide the case; or

"(b) Dismiss the action or proceeding if the Court of Appeals determines
that no other court or tribunal is authorized by law to decide the case.

"* * * * *

"(5) Upon referral of a question to the Court of Appeals under this
section, the Court of Appeals shall:

"(a) Transfer the case to the court or tribunal that the Court of Appeals
determines to be authorized by law to decide the case;

"(b) Decide the case if the Court of Appeals is the appropriate court; or

"(c) Dismiss the action or proceeding if the Court of Appeals determines
that no court or tribunal is authorized by law to decide the case.

"(6) If an action or proceeding against a public body is transferred under
this section, and the action or proceeding was filed in the transferring court within
the time allowed by law for filing the action or proceeding in the receiving court
or tribunal, the case may not be dismissed as not being filed within the time
allowed by law.

"(7) If an action or proceeding against a public body is filed in circuit
court or the Court of Appeals based on a reasonable interpretation of law, and the
circuit court or the Court of Appeals determines that the case should be
transferred under this section, the case shall be transferred to the appropriate court
or tribunal in the manner provided by this section and may not be dismissed as not
being filed within the time allowed by law if:

"(a) Under the interpretation of law made by the person filing the action
or proceeding, the action or proceeding was filed in the proper court;

"(b) Under the interpretation of law made by the person filing the action
or proceeding, the action or proceeding was timely filed in the transferring court;
and

"(c) Any delay caused by the failure to file the action or proceeding within
the time allowed for filing in the receiving court or tribunal does not substantially
prejudice an adverse interest or public interest."

8. DHS in fact moved for a transfer order, but did so on the theory that petitioners' challenge
should have been brought under ORS 183.400, which gives this court original jurisdiction over
challenges to administrative rules. Alternatively, DHS asked the circuit court to refer the case to
this court so that this court could determine which tribunal had authority to resolve petitioners'
challenges. Petitioners, in response, urged that their rule challenge properly could be brought as
part of a proceeding to review DHS's orders terminating their benefits, rather than as an original
proceeding in this court under ORS 183.400. The trial court denied DHS's motion to transfer the
case and resolved the merits of petitioners' challenge on summary judgment.

9. From the affidavits submitted by petitioners in the circuit court proceedings, it appears
that most petitioners timely requested contested case hearings despite DHS's notice advising
them that they were not entitled to a hearing. For any petitioner that may not have requested a
hearing, DHS must correct its notice to advise them that they are entitled to a hearing.

10. Indeed, because the rule that DHS announced in the notices was a temporary rule, DHS
was under a statutory obligation to notify petitioners. ORS 183.355(2)(b); Calif. Table Grape
Comm'n, 109 Or App at 225 (under ORS 183.355(2)(b), affected persons "must be notified" of
rule change implemented by temporary rule). DHS may or may not have sent the notices in an
attempt to comply with the statute. Regardless, the necessary implication of the majority opinion
is that whenever an agency lawfully promulgates a temporary rule, every person affected by it
will be entitled to a contested case hearing.